Bank On It: International Banking For Immigrants

When the idea of moving overseas became serious, I, of course, had fantasies of multiple bank accounts spread around the world. Perhaps we could even find a use for a Swiss bank account. But the reality of arranging functional banking in a new country (particularly in Ireland) proved to be far less sexy, and far more frustrating.

Even if you’ve spent years establishing good credit in your home country, chances are you will be seen as an unproven risk when you move overseas. Even without asking for “credit” of any sort, today’s world of rampant fraud and identity theft has forced banks the world over to be cautious about who they let in the door. For that reason, most banks now ask that you provide some form of guarantee that you are authentic and trustworthy, even to get a simple checking or savings account. While that may be as simple as providing a copy of a recent paid utility bill in your name, it adds to your list of pre-move minutia.

Back at home, where you might have 20 years of records to draw from, that is a fairly low hurdle. But if you are new to the country, and have not established any utility service, it could be a bit tricky. It gets even more difficult when you realize that the utility companies in many countries prefer (or demand) that you pay by automated electronic funds transfer (EFT). That means you must have a bank account to set up your utilities. In effect, you can’t get a bank account without a utility bill, and you can’t arrange utility service without a bank account. What to do?

Before you get any clever ideas, I’ve already checked; it’s unlikely that utilities anywhere will accept an EFT payment from a foreign bank. Even if they would, the transfer fees would raise your effective utility rate to a ludicrous level. A more effective option is for you to bring copies of utility bills from home and a letter of reference from your home bank stating that you’ve been a customer in good standing for however many years you’ve managed to stay on the straight and narrow.

That may work, or not. If not, you may need to have some friendly local vouch for you in some way. Our property manager used his standing in the community to get our utilities set up in our name. That got the ball rolling, and soon we had a local bank account. But that’s about half the battle.

For those of us who still have bills back at home, we need an easy way to continue paying those bills. For that, and other reasons (tax refunds/payments, gifts to/from family, etc.) it makes sense to keep a bank account open back at home. If you do this, take the time to go into the branch (do not just call) before you move and get a list of the fees and administrative restrictions (in writing) that will apply to your situation. These include (but are not limited to): minimum balance, incoming/outgoing international transfer fees, mailing fees, processing times, international check clearance restrictions, SWIFT/IBAN codes, international ATM fees, etc.

You’ll need all of this information at one point or another to get funds from home into your overseas account, and vice versa. And, be aware that these days, travelers checks are almost useless. So cash, ATM/credit card, EFT, and (more and more infrequently) checks are your best options for moving money around.

That said, when you first relocate and need cash to get started, you can’t really wait 7-10 days for a big check to clear in your new account (particularly if the bank insists on an initial cash deposit), and may find yourself carrying quite a bit of cash on the plane. If that happens, be safe and split it up among your group, and split those amounts up as well (in different carry-on bags, shoes, wallets, pockets, bras, etc.).

Finally, before you leave your home country, try to make sure that whatever bank you plan to use in the new country can communicate with your bank back at “home”. By “communicate” I mean, make sure that you can transfer money both ways, or at least one way. And look into the possibility of doing credit card transfers, or transfers through third party banks to move money in the other direction if need be.

If one bank won’t transfer money internationally, keep checks around for that account after confirming (in advance) that the other bank will accept them, and will process them in a timely fashion. Basically cover your bases, and try not to be surprised. Money surprises are the worst. I speak from experience.
One of the most frustrating parts of Irish banking is that they aren’t required to notify customers individually of fee changes. Because they like to believe that everybody reads the papers, Irish banks have convinced regulators that they should only be required to post a newspaper ad announcing any changes. If you ask why they can’t email most customers, and send a letter to the paltry few who have resisted online banking, the bankers protest that it’s too difficult for them to perform due diligence.

Unfortunately, getting use to idiosyncrasies like these is all part of living in another country. And sadly, if your finances straddle countries, you’ll have to tolerate two financial masters, and juggle the faults and folly of both.

Bonus – Irish Banking Rant

In a country with such a long history of money laundering, recent experience getting screwed by the banks, and clear collusion between financial institutions and politicians, you’d think the Irish would demand to have the gold standard of independent financial oversight, with no political involvement whatsoever. Instead they grumble in private about the craven nature of their leaders, wanton douche-baggery, and the thinly veiled fraud that constitutes Irish financial institutions, but there’s no real push for reform.

Sure, we had to step over a few unwashed protestors during the Occupy movement, but everyone more or less expected that to run its course. And, like the banks themselves, simply waited for life (and the screwing) to go back to normal.

The Irish have allowed weird antiquated policies like AIB’s “home branch policy “ to persist. In this pathetic ploy, AIB has arranged its slate of services such that customers must return to whatever branch they opened their account in to perform such onerous tasks as cashing checks, transferring money, and paying certain bills. They’ve announced that it’s too restrictive for every branch to be able to provide standard service to every AIB customer.

The idea that every branch can’t handle every customer is ludicrous. But rather than demanding proper service, the Irish allow their financial masters to dictate policy to them, and the masses are simply grateful to have access to their own money at all. But that level of allowing themselves to be lead around by the nose, and dictated to by those in power seems to be the all-to-common, self-inflicted lot of the Irish.

It’s maddening to see it persist in what, despite a few niggling concerns, is really quite a nice place to live. But it’s particularly maddening to see it continue when they have the gold standard of reasons to insist on reform of the Irish financial sector

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About Glenn Kaufmann

I'm an American freelance writer, photographer, and web publisher. I specialize in writing about travel, food, arts, and culture. I also write dramatic scripts for stage and screen.
I'm based in Ireland.

15 Responses to Bank On It: International Banking For Immigrants

Hi Glenn,
Enjoyable read as always but I am curious to learn more about our long history of ” money laundering “. Sure, it’s well known that organizations such as the IRA used bona fide business fronts to wash their ill gotten gains during the bad times but I never knew we had a “history” of it. Certainly when one would compare us with the industrial levels of nefarious financial dealings orchestrated from the United States , we are surely nickel and dime.
Correct, our banks are a mess and we know the reasons why. The disgraceful management of all the local banking groups have resulted in the Irish tax payer picking up the bill to the tune of 50 thousand dollars per family. That’s real money coming from real people in a country where we don’t have the option to print our way out of trouble. Our debts were called in and we fronted up to pay them or attempt to pay them anyway. Had we not done so and defaulted on our international obligations a la Iceland, the problems for European banks would have multiplied exponentially eventually leading to a massive Euro default……. All the printing presses in the US would have had trouble dealing with that one.
Finally Glenn, nobody cashes a cheque in Ireland 2013, very few transfer money from a branch. Don’t you have online banking in the States, it’s been here for years !!

From what I’ve heard from Irish friends, and been able to piece together, because life in Ireland was relatively peaceful in the late 70s, 80s, and 90s, and the government was “relatively” stable, Ireland was considered a safe place to hide and shelter money. That’s the case for any country with a stable government. It wouldn’t do you any good to shelter money in Ireland, just as it does me no good to shelter money in the U.S. (though lots of people from other countries do just that). As citizens of those countries you and I have to pay taxes, etc. here, and our deposits are often scrutinized more closely than other depositors. Those that do not can park vast sums of money in Irish and American accounts with very little cost or interference.

In the same way that Ireland was (for a certain period of time) known as a place where you could bring a briefcase of case to Dublin on a Wednesday, speak to the right “official”, and leave on Friday (sans cash) with genuine “legal” Irish citizenship and a passport, banks and businesses would, unofficially move money around (for a fee), into this account, and out of that one, and clean it up for you. Back in the day the same thing was done for terrorists.

The Money Laundering and Terrorist Financing Act of 2010 has largely dealt with that. And there have been anti-drug money laundering laws on the books since 1977. But from what I can tell, there were no generalized anti-money laundering laws in Ireland until the Criminal Justice Act 1994. That law has since been amended and updated to tighten loopholes, and account for ( I’m sure) changes in electronic banking, etc.

You say that an Irish default would have crushed the EU economy. Perhaps. But that’s exactly what the EU bank would say to keep you in line. By the way, Iceland is doing quite well now.

Yes, we have online banking in the U.S. I used it there, and I use it here. You, my friend, are wrong. There are still plenty of Irish businesses (and U.S. businesses, friends, and family members) that issue checks for various reasons of accountability. All of those must be deposited at a branch. And if you are a customer of AIB, you can only deposit checks at the branch where you opened your account. That, given their constant moan about wanting more people to take advantage of modern technology in banking, is Third World banking. In fairness to upper management, I’ve heard from a friend with connections at AIB that this policy is in place because the branch managers said it would be too difficult for them to handle customers from other branches. If life is sooo hard for them, perhaps fewer customers is the answer.

So, while, I use online banking, I can’t use it for everything. And given the fact that Irish banks are under no legal obligation to efficiently notify me of fee or service changes, I am really hesitant about giving them autonomy over that much of my finances.

My husband managed to get a bank account in Ireland right away in his name by bringing in a reference from his employer with his employee number and PPS number on it. However, I was unable to get a bank account – and we weren’t permitted a joint bank account – until I had “proof of residency,” which could include an official document in my name with our current address on it. Of course the lease itself didn’t count. I used the letter the Department of Social Protection issued when it assigned me a PPS number. But it was all definitely a hassle that went on for about 6 weeks before it was fully sorted.

Secondly, for readers contemplating a move from the US to the EU (or vice versa), I highly recommend WorldFirst, a British e-bank, as an intermediary bank between your EU bank and your American one. They operate in sterling, euro, and dollars, and don’t charge a fee for currency transfers above $8000 (or the equivalent in euro/GBP). Their “take” on the currency exchange is only a tiny fraction above the spot rate, which means they offer a much more attractive rate than most mainstream banks. It was a bit of a pain to get an account set up (requiring notarised copies of bank statements, passports, etc.), but we’ve been happy with their services, and I think they’ve saved us quite a bit of money as compared with the fees our home banks in each country would have charged for the same services.

Hi Glenn!
Just stumbled across your blog. I just moved back to California from Galway. I was living in Ireland for a year on a student holiday work visa. Not sure if you have all your banking transfers sorted but I found a quick and reliable way to transfer money from my AIB account. Thank goodness! It’s called Transferwise.com. They’re run by the creators of Skype. Hope it helps!

The US has signed an intergovernmental agreement with Ireland and FATCA is to go into effect July 1, 2014. What do you know about US FATCA (Foreign Account Tax Compliance Act) and FBAR (Foreign Bank Account Reports) and how difficult is it to get US tax advice in Dublin? Or, do you have to engage someone in the US for these requirements?

Thanks for reading the blog, and thanks for taking the time to write in and contribute.

I’m no expert on these hings, and haven’t heard a lot about either of these. But, I did attend a tax seminar for American expats held here in Dublin last year. It was put on by several local accountants, and some US accountants, and folks from the US embassy and Irish Revenue.

At that seminar they mentioned the 10,000 limit on all overseas accounts held by US citizens. I believe this is part of FATCA, and requires banks worldwide to report (annually) the balances of any accounts held by US passport holders which exceed $10,000 at any time during the year (even if it reaches that level just a day or two).

This provision applies (as I understand it) even in Switzerland and other traditional tax havens. The intention is to catch fat cat who are offshoring money and avoiding their tax liability. But, the limit is so low that, unfortunately, it affects just about everybody. That said, if you are not looking to hide money, it shouldn’t be a problem.

It is hard to find good US tax advice in Ireland.

We use an accountant in the US who has been good so far. She seems to have loads of generalized international experience, and she was recommended by other expats.

Our previous accountant, who is a friend and was great when we were in the US, didn’t have the time to dedicate to our account when we moved overseas. And, even if you have a “simple” return, it often takes a bit more time and attention to process an “expat return”.

Thanks for your answer regarding ‘finding good US tax advice in Ireland’. I guess the answer then is for anyone leaving the US for work or adventure in another country and opportunity for their kids to experience culture beyond the US is to have good US tax advice before they venture forth and make sure they can retain that service while they are out of the US (it will come at a cost of administration for compliance; it has little to do with actual taxes owed).

FATCA will soon affects 6 – 7 million US expats around the world. FATCA is not about a $10,000 limit — that is the amount of aggregate accounts one holds outside the US for FBAR (yearly Foreign Bank Account Reports due to US Treasury by June 30th of each year) if you and a spouse’s accounts total at any time in the year that US$10,000 amount held in Ireland (or any other country). I hope that you and other US expats living in Ireland do know about that from your US accountants (many US accountants don’t know enough about international taxation, unfortunately and filing from abroad is much different than filing within the US) and have filed for the years you’ve been there as the penalties for not having done so are outrageous and many middle and lower “class” people are being ‘criminalized’ by the US for not having filed FBARs.

Again US Persons Abroad need to know this is not about taxes owed or being FATCAt’s for there are US tax treaties for most countries, including EARNED income (some passive income may not be protected); it is about penalties and data collection on US Persons (which are NOT just US citizens). The US and a tiny African country, Eritrea, are the only countries of the world that tax based on citizenship, rather than by residence as the rest of the world.

Unfortunately if the US does not change to residence-based taxation, FATCA may prove to end the right of US persons to venture to other lands for whatever reason, to be expats — unless a big corporation that sends them abroad will be able to cover for them all their international tax preparation and filing costs. The US considers “foreign accounts” even if those accounts for any US person in a foreign land are not “foreign” to people who need those “foreign” accounts to even start to search for a place to live, to pay rent or a mortgage or even buy groceries at the simplest level. $10,000 isn’t much. Can expats exist abroad with only bank accounts that reside in the US while they reside abroad?

With FATCA (on top of FBAR) foreign financial institutions start (as it stands right now) will search for US Persons starting July 2014, turning over “foreign” account information either to the US IRS directly or to the countries’ tax authorities to pass on to the IRS. Countries are signing intergovernmental agreements to bypass for US Persons other countries’ privacy laws.

The actual tax evaders (the FATCAts referred to) will (mostly) reside in the US and send their money offshore; they won’t be US Persons actually living and needing “foreign” accounts in other countries, people whose only crime is ignorance because the US has not made this information readily available. But then, we all know what is said about ignorance of the law not being an excuse.

Anyway, this is a very complex subject and anyone who could be considered a US Person in a foreign country needs to know about their tax return and reporting responsibilities as US citizens. Not many ‘real’ tax evaders will be found among the expats living and working in foreign countries even if they have failed to file US tax returns (the minimum to file is not the FEIE) and FBARs (Foreign Bank Account Reports). FATCA and FBAR may be an important subject for your blog, which otherwise presents such good information for what persons can expect moving to Dublin.

Good luck to us all and may US expats and opportunities in other lands not become extinct.

PS: Another thought for your blog is having as good information for those contemplating moving there a list of Dublin banks that will open and retain US Person accounts. US Persons in some countries are already experiencing not being able to open accounts at any but the larger banks, with a balance minimum required. Mortgages for US Persons are becoming and may become harder to get and retain. Banks, insurance companies, business partners in other countries, rightly so, do not want to deal with US Persons with US FATCA. That will not get them around their having to register with the IRS as they will still likely have to deal with other “foreign” financial institutions who deal with US Persons and US currency.

It’s becoming a strange new more complex world, even as the US is one of the world’s largest actual tax havens and openly encourages foreign business (with no reciprocal reporting to other countries — although they do falsely promise such with FATCA as that needs to be passed by US Congress and what is the chance of that?)

Knowing what I know now, I would only consider moving abroad armed with all the US tax (and other) law I am responsible to know and follow. I have lived in Canada for 45 years.

This will be a useful reference for US expats in Dublin (and elsewhere in Ireland) looking for an accountant for preparation of US tax returns and FBARs

(FBARs are fairly easily prepared on one’s own and accountants generally don’t want to take the liability; new FATCA Form 8938, generally duplicative of FBAR but attached to your 1040 / 1040NR is the most onerous, as are Forms 3520 and 3520A’s for “foreign trusts”. In the city where I live, same country accountants generally don’t want to deal with US income tax returns, especially IRS Form 8938. All expats should make themselves very aware of PFICs / mutual funds and US reporting as well as having any account that would be considered a “foreign trust”.)

In links on the US Embassy site to the “accounting” sites, can also be found links to FATCA and FBAR information for US expats and link to IRS site for terms of the intergovernmental FATCA agreement, including account exceptions, and other agreements that apply. Be informed; be prepared.